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FDIC to Propose New Rules for Large Regional Banks

S.J. Steinhardt
Published Date:
Aug 23, 2023

The Federal Deposit and Insurance Corporation (FDIC) will propose new rules on Aug. 29 to govern how large regional banks prepare for their own failure, Reuters reported.

The proposed rules are on the agenda of an open meeting to be held at the FDIC headquarters on Aug. 29. The rules are aimed at strengthening oversight of the banking system, particularly after a number of bank collapses this years, including three of the largest in U.S. history: Silicon Valley Bank, Signature Bank, and First Republic Bank.

The proposal will likely require banks with $100 billion or more in assets to issue long-term debt that could absorb bank losses before depositors and the FDIC's deposit insurance fund do, FDIC Chair Martin Gruenberg said in a speech at the Brookings Institution earlier this month.

The FDIC will require such lenders to strengthen their recovery and resolutions plans, according to the meeting agenda. That will give the agency more flexibility when a bank falls into its receivership, including identifying parts of the bank that could be sold separately.

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